Image credit: The Sun Daily
KUALA LUMPUR (Sept 30): The RAM Business Confidence Index (RAM BCI) survey for the third quarter this year (3Q21) showed that business sentiment of Malaysian small and medium enterprises (SMEs) has improved amid the relaxation of restrictions and reopening of most sectors.
In a statement, RAM Ratings Services Sdn Bhd said RAM BCI for 3Q21 recovered to 41.4 points from 33.2 points in the preceding quarter (2Q21) — albeit still below the positive sentiment threshold of 50 points.
“The improvement in the overall index was led by increases in the sales and profitability sub-indices, which respectively rose to 45.9 (+21.0 points) and 37.0 (+13.9 points),” it said.
The latest RAM BCI survey polled 78 firms, chiefly SMEs and micro enterprises. It was conducted online from Sept 1 to Sept 14, 2021.
The poll of 78 respondents shows firms are not yet out of the woods as they continue to face the lingering effects of the pandemic along with other emerging challenges. Most firms surveyed indicated they are not ready to hire or to expand capacity.
The survey showed 81% of the firms polled cited economic weakness still dominates the list of challenges, followed by the rising costs of doing business (66%).
In terms of priority, the majority or close to 60% of the firms said surviving the current crisis remains the primary concern, followed by 17% polled who have made building cash buffers their focus.
As restrictions are gradually relaxed and sectors reopen, close to 80% of firms surveyed have resumed operations, RAM said.
Of this, some 42% recently reopened amid the relaxation of controls while 36% are essential service providers that have stayed in business during the MCO period.
Notably, 22% of the firms showed they remain closed.
While the relaxation of restrictions and reopening of most sectors is imperative to pivot Malaysia towards recovery, business operations would need time to ramp up to pre-pandemic capacity given the prolonged lockdown, RAM noted.
The majority of respondents are not yet fully operational and continue to operate below full capacity, the survey showed.
“Fewer than 20% of respondents are currently operating at full force. Around 32% expect to be fully operational by 4Q21 while another 33% expect a return to normalcy by 1Q22,” it added.
The survey also showed SMEs are still in need of continued financial aid and support as uncertainties over the containment of new waves of infection remain, moving into next year.
“We applaud the various stimulus packages for small businesses but urge policymakers to continue direct and indirect support measures to facilitate the recovery and ensure the long-term survival of these firms,” RAM said.
Source: https://www.theedgemarkets.com/article/ram-survey-shows-sme-business-confidence-improved-relaxation-restrictions-overall